Continuing Professional Development Report: New Company Project

This report, focused on continuing professional development, examines the strategic acquisition and leasing of a commercial building for a new company. It begins with an introduction to the importance of building ownership and the complexities of leasing, emphasizing the need for careful planning and financial consideration. The project description section highlights the importance of space for future expansion and the potential for generating revenue through subletting and additional business ventures like restaurants. A detailed analysis of a lease proposal document is included, outlining key terms such as lease duration, renewal options, proposed usage, rent, security deposits, and exclusions. The report also provides calculations for rent per square foot and discusses percentage lease determination. Overall, the report emphasizes the importance of a well-structured approach to commercial building acquisition and management for maximizing financial opportunities and ensuring long-term business success.

Continuing professional development
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Continuing professional development
Introduction & Preliminaries
Acquiring a commercial house for business is one of the greatest achievements a new
company can ever make. Such kind of building gives the company the autonomy to perform
their operations with minimal surveillance from the individuals who supposedly lease the
building. The cost of acquiring new building is usually relatively large especially because it
has the value of the land attached to it. This explains the reason why a new company would
have to lease space at some point. Moreover, due to financial constraints, a new business can
be obliged to acquire spec through leasing. However, it is important to understand the leasing
procedures and all the requirements for getting into such an agreement. This is because
certain legal requirements are binding to the agreement. On the other hand, understanding the
project is essential before any other thing to the new company1.
Description of Projects
This being a new company, the project must be one that allows space for future expansion.
This is from the basic understanding that any new projects may have some changes in future
due to the changes that occur in the global market with regards to the needs of the consumers
of the products. Taking the need for expansion into considerations is the first most important
step to the success of the business. The space for expansion should in line with the land
acquired to bridge the problem of having to improve the size of the building. On the other
hand, it can be with regards to the scale of the offices to allow the use of the room by many of
staff in the future. It is a fact that a company that does not think of expansion at the point of
inception is as good as dead from the onset. The rule is simply for the new organization, to
1 Harris 2015

survive longer think big, to remain forever, and think of how best you can expand what you
have at the beginning2.
An occupation of 30 percent of the office building at the onset of the project is a good start
for the company. This being a new business, there is a need for the management to raise
finances every fiscal year until the time the business would be able to be stable with the flow
of cash from its operations. Moreover, it is not certain whether the company would make
proposed profits during the first fiscal year from its undertaking. The truth of the matter is
any eventuality may arise from the firm line of operation, and this may cause severe losses
that may hamper progress in the business. For this reason, therefore, the company must have
a second plan on how to raise finances. With 70% un-used office, I cannot think of a better
way of raising extra money apart from making use of the free space. This would form part of
the smart thinking that the company management is required to have. However, the big
question is, ‘how do we make use of this space to generate funds?'
One of the lucrative projects that the new company can get into to make good use of the free
space is renting the space to people who need offices. Most self-proprietor operators in the
entire world are need of an office space where they can have their operations3. While most
people would be specific on the kind of the office design they want, most people would
simply need a spec that is big enough to act as an office. The need for the variety of the
possible tenants can be achieved by having office spaces with different outlooks. Rents paid
would heavily depend on the size and prospects of the office acquired. On the contrary, the
interior décor of the rooms should be left at the mercy of the tenants since each tenant may
have different taste4.
2 Duffy, Francis, Colin Cave, and John Worthington. 2016.
3 Duffy, Francis, Colin Cave, and John Worthington. 2016.
4 Matzler, Kurt, Viktoria Veider, and Wolfgang Kathan. 2015.

It is not advisable to have the entire 70 percent of space used for offices only. This being a
commercial building, a lot of business would be going around at any particular time. It is
therefore important to incorporate other business buildings in the building as well to supply
the needs of the occupants of the building. It is well understood that the ways of life of people
are changing quite a lot and every business must be flexible to embrace these changes. The
best thing that the company can do is not only to invest in the building but also to consider
investing in the people occupying the building. The fact is that these people would need food
and other basic needs at the end of the day5. For this reason, therefore, part of the space of the
office can be utilized in installing a facility such as a restaurant. This restaurant should be
owned by the company. Moreover, it should focus on providing meals that would be
preferred by most people in the building such as snacks and various kinds of beverages. This
way, the company would have the money it spends on its employee and various building
maintenance retrieved back through this business. In a way, the organization would be able to
create a self-sustaining business operation that would be able to survive the business industry
for quite a long time. Moreover, it would be easy to cover up for the losses through the
multiple operations that would be going on within the building6.
The investments that other people would be doing within the free space in the building should
be diverse. This would be achieved by allowing all manner of business to be conducted
within the premises through the rented spaces. It is the mandate of the company to ensure that
space has a design that can accommodate different business. Increasing the operations within
the business increases the financial flows, and this makes the organization's investment such
as the restaurant to make good profits. Care should, however, be taken with regards to the
5 Matzler, Kurt, Viktoria Veider, and Wolfgang Kathan. 2015.
6Harris, Rob. 2015.

infiltration of the building with illegal business. Moreover, the building must meet the
standard requirements of the law before it can be used for multiple operations7.
Identification of the tenants would be a very critical step in this project. The tenants that
occupy the premises must all be able to pay their rent at the end of every month duly.
Therefore, tenants would be identified based on their business proposals before they can
occupy commercial spaces. However, those who want to occupy the building for the office
would be asked to provide an overview of the operations they would have in the office. This
would help to ensure that the landlord understands all the transactions in the premise and
identified tenants with a lucrative business that cannot default in rent payment8.
Leasing Proposal
The lease proposal is an important document for the acquisition of this building. The new
company must ensure it is provided with a copy that is correctly filled and duly signed. This
would be the only line of defense in a court of law in case any of the parties involved in the
contract of getting the building breaches the agreement. With proper documentation and
filling of the lease of proposal document, it becomes easy to operate within the premises. The
contract proposal would be provided before the rental agreement is signed9. If the tenant finds
the provisions in the lease proposal suitable for them, they will consent to it and request for
contract agreement which would act as the binding document for the tenancy. Sample lease
proposal that can be used is as seen below.
Lease Proposal Document
7 Harris, Rob. 2015.
8 Reichardt, Alexander. 2016.
9 Halvitigala, Dulani, and Richard G. Reed. 2015

Lease Proposal Document
Premises- Rental Building (Insert name of the building)
[P.O BOX. XXXX-XXXXX]
Sentul, 51000
September, 4th 2017
September, 4th 2022
Dear (Insert name of the tenant.)
This Lease Proposal document herein outlines the proposed terms for a lease of the premises
described above to you, [TENANT NAME] ("Prospective Tenant"), by [LANDLORD
NAME] ("Landlord"). If you are interested in proceeding, the full Lease Agreement will be
prepared and submitted to you for review and signature.
1. The term of lease — the lease commences on Monday, 4th September 2017 and ends on
4th September 2022.
2. Renewal option — the lease can be renewed once for five years.
NOTE: The lease is not transferable to any other tenant other than the one whose name
appears on the lease document. Tenancy is continual for the period agreed upon in this
document and can only be terminated due to failure to pay rent. However, before quitting the
premises, the tenant must provide a 30 days notice indicating the time they would leave the
premises. The Landlord may, however, send the tenant away at any time in case of breach of
any of the regulations of using the building10.
.
10 Johnson, Steven D. 2015

3. Proposed usage — Office spaces and commercial use
Note: The building would be used for office spaces and commercial purposes. The areas for
each purpose would be designated to avoid confusion and interference.
4. Rent — the monthly rent paid would be $ 100 for the office space and $ 120 for the
commercial occupant. Rent would, however, increase at a rate of 5% percent upon renewal of
the leased space.
5. Security Deposit — the building is under 24 hours CCTV surveillance. The entrance of the
building would be heavily guarded by security officers with scanners to monitor all entrants.
6. Inclusions — the amount of rent would be inclusive of internet and telephone connectivity.
Moreover, water charges would also be part of the rent paid every month. The usage of these
services would monitor at the central server of the building, and one may be requested to pay
extra charges in case of extreme usage of this services. The additional fee paid may not
exceed half the rent paid every month.
7. Exclusions — these include electricity and cleaning operations. Every tenant would be
expected to pay their electricity bills. Moreover, they should organize on regular cleaning of
their work space and corridors as frequently as possible to maintain high hygienic standards
at all times.
8. Assignment or subletting — the tenant has no authority to sublet or re-lease the space
allocated to them to anyone. Notice to quit the promise must be provided to the landlord by
the tenant before new occupant can be given the space.
9. Other items — the tenancy period must be as indicated in this lease agreement. Failure to
abide by the period indicated herein, the tenant would be required to continue paying rent
until the time in this agreement expires or until a new tenant is identified for the free space.

10. Lease Agreement — A formal, written lease agreement would be executed between the
Parties that would become the final agreement between them.
If you are interested in proceeding to finalize a formal, written Lease Agreement under the
scope set out above, please contact [Insert name of contact person] at [insert daytime mobile
or telephone number] OR [insert contact person's email] at your earliest possible
convenience.
This Lease Proposal does not constitute a contract, or an offer to contract, but rather an
invitation to proceed with further actions by the Parties towards the execution of a formal
agreement between the Parties.
[Insert Landlord's full name]
[Insert Address]
[City, state zip]
[Indonesia]
Appendices & Schedules
a. Calculations of rent paid per Square foot
Calculations of rent paid per Square foot
Rent for office space in this building is set at $ 10 per square foot of the leased space.
Expressing this as either annual or monthly amount can be done as follows:
A 2400 square foot office space is quoted as $ 10 per square foot giving; 2400 × $ 10 = $
24,000 annual rent.
Monthly rent, therefore, would be; 24, 000 ÷ 12 months = $ 2000 monthly rent11.
11 Johnson, Steven D. 2015.

b. Determination of Percentage lease
It is important to determine the base rent that is needed by the company wants
before having those in the commercial buildings add a percentage of their gross
retail income to the base rent. This is because the business environment varies
thus leading to a variant gross income every month for the occupants of the
commercial buildings. Ideally, imposing a fixed price for the occupant would not
be logical.
. Percentage added to the base amount can be calculated as indicated below.
Minimum base rent + percentage over a given base amount. This is a case in
which the tenant pays a minimum monthly base rent. After paying the rent, they
add a percentage of their gross receipts over a certain amount. If monthly base
rent is $ 2,100 and gross receipt is 4% over 55,000. Assuming an occupant gets a
gross receipt of $ 80,000 in a month, rent that month would be:
$ 80,000 – $ 55,000 = $ 25000
$ 25000 × 4% = $ 1000
Rent = $ 2,100 + $ 1000 = $ 3,100
This can also be determined by using the formula of minimum base income added
to the percentage of all the gross receipts. This ideally means that rents would be
paid on all the gross receipt from $ 0.
For example, having $ 400 base rent and 2.2% of the gross receipt. If a business
person within then makes a monthly receipt of $ 80,000, his/her monthly rent
would be as follow:
$ 80,000×0.022 = $ 1,760
$ 1,760 + $ 400 = $ 2,160 monthly rent for the commercial space.

Bibliography
Burton, Gregory. "The law affecting rent review determinations ; The law affecting valuation
of land in Australia [Book Review]." Bar News: The Journal of the NSW Bar
Association Summer 2015 (2015): 76.

Duffy, Francis, Colin Cave, and John Worthington, eds. Planning office space. Elsevier,
2016.
Halvitigala, Dulani, and Richard G. Reed. "Identifying adaptive strategies employed by office
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Harris, Rob. "The changing nature of the workplace and the future of office space." Journal
of Property Investment & Finance 33, no. 5 (2015): 424-435.
Johnson, Steven D. "Flexible cash farm lease considerations." Ag Decision Maker
Newsletter 13, no. 5 (2015): 4.
Johnson, Steven D. "Flexible cash farm lease considerations." Ag Decision Maker
Newsletter 13, no. 5 (2015): 4.
Matzler, Kurt, Viktoria Veider, and Wolfgang Kathan. "Adapting to the sharing
economy." MIT Sloan Management Review 56, no. 2 (2015): 71.
Reichardt, Alexander. "Sustainability and the Leasing Decision of Office Occupiers in the
US." In Sustainability in Commercial Real Estate Markets, pp. 65-92. Springer
Fachmedien Wiesbaden, 2016.